One-Time Amnesty Scheme for Export Obligations under FTP 2023-28: A Fresh Start for Defaulting Exporters
The Indian government has recently introduced the Foreign Trade Policy 2023-28 (FTP 2023-28) to promote exports and boost economic growth. One of the key highlights of this policy is the introduction of a special one-time Amnesty Scheme to address default on Export Obligations for EPCG and Advance Authorizations.
Export Promotion Capital Goods (EPCG) and Advance Authorizations are schemes that allow Indian exporters to import goods without paying customs duties, provided they fulfill certain export obligations. However, in some cases, exporters may default on their obligations due to various reasons, such as lack of demand, supply chain disruptions, or other business challenges.
The government has implemented a one-time Amnesty Program under the FTP 2023 to address this problem. This program is designed to help exporters who have struggled to fulfill their responsibilities under Advance Authorizations and EPCG and who are suffering from the high custom and interest charges brought on by pending cases.
This plan allows for the regularisation of all open cases of failure to complete the Export Obligation (EO) of the aforementioned authorizations in exchange for the payment of all duties and taxes that were previously exempted in proportion to the outstanding Export Obligation. Under this arrangement, the maximum amount of interest that can be paid is 100% of the exempted duties.
The amount of Added Customs Duty and Special Additional Customs Charge, on the other hand, is exempt from interest payment, which is expected to be a comfort to exporters as their interest costs will be significantly reduced.
The government's “Vivaad se Vishwaas” campaign, which aimed to resolve tax problems amicably, is consistent with this amnesty program. The government wants to lessen litigation and promote trust-based partnerships to help exporters with their problems by giving defaulting exporters a second chance.
Under this amnesty, it is intended that these exporters will get a second chance and a chance to comply. By increasing exports and lowering the amount of outstanding litigation, this strategy will not only help the defaulting exporters but also the broader economy.
To boost the export industry and encourage ease of doing business, the Indian government's one-time Amnesty Program for Export Obligations under FTP 2023 is a commendable effort. Defaulting exporters can benefit from this program to resolve their outstanding problems and reopen their businesses without having to pay exorbitant duty and interest fees.